Doctoral Dissertation Research in Economics: The Theory and Practice of Reverse Share Tenancy

Cornell Univ - State: Awds Made Prior May 2010, Ithaca NY

Investigators

Abstract

The aim of this project is to collect and analyze field data regarding land tenancy contracts in rural Madagascar in order to test hypotheses emerging from new theoretical insights on sharecropping contracts in poor communities. In Madagascar and other low-income countries, landlords party to sharecropping agreements are often poorer than their sharecropper tenants, a phenomenon referred to as "reverse share tenancy" in a small, purely empirical literature on such phenomena in the developing world. Even though many studies have been conducted on sharecropping, the few published references there are on reverse share tenancy are purely of a descriptive nature and do not offer a sound theoretical framework to explain why such contracts emerge at all. This research project aims to confront a few theoretical explanations we have recently developed for reverse share tenancy with field data in order to determine which posited mechanisms best explain the existence of reverse share tenancy in Madagascar. This grant would finance a survey of 400 randomly selected households from five provinces in rural Madagascar that have a high density of share tenancy. It will use standard cluster sampling techniques, with oversampling of households suspected of entering sharecropping agreements. For each household, individual-, household- and plot-specific variables will be collected along with data on inputs, landlord supervision, cost- and output-sharing, contract choice and conditions. The field data will then be used to estimate microeconometric models that would first test the hypotheses derived from the theoretical models and then discriminate between competing explanations using a likelihood-based test for non-nested hypotheses. Broader Impacts Sharecropping is pervasive throughout the world. A much clearer understanding of reverse share tenancy would emerge from this research that could then be used to guide economic policy, especially in countries like Madagascar where sharecropping remains banned and property rights in land are often insecure. A better understanding of this sharecropping is needed to inform land policies intended to increase the welfare of poor rural households. Moreover, by explaining sharecropping in a way that accommodates reverse tenancy, this work will contribute more broadly to the longstanding, important literature on agrarian contracts.